Jeb Bush Invested in Enron Liquids

Published 8:00 pm, Wednesday, February 20, 2002

Jeb Bush invested about $91,000 and turned a small profit in 1995 from an Enron partnership, tax records show.

The enterprise now is controlled by a former Enron president who has been helping the Florida governor raise money for his re-election bid.

Bush's investment in Enron Liquids L.P. three years before he became governor is the only known investment by a member of President Bush's immediate family in an Enron partnership.

Investigators have been looking at some of Enron's privately traded partnerships as contributors to the company's collapse. Enron Liquids, however, was publicly traded and is not part of the investigation.

Jeb Bush's investment brought him a $7,000 profit, according to his 1995 tax return.

"It was an investment for less than a year and it was done long before last year's bankruptcy," the governor said this week.

President Bush said last month that his mother-in-law was among Enron Corp. stockholders who lost money on the failed company _ about $8,100.

Spokeswoman Katie Baur said Thursday the Jeb Bush investment was chosen for him by an investment advisory firm.

Democrats eager to defeat the president's brother in the fall election are trying to make an issue of his ties to Enron.

In a state whose pension fund lost more than $300 million in the collapse, Bush's fund-raising trip to the Houston home of former Enron president Richard Kinder "rubs in the face of people who lost their life savings," the chairman of the Florida Democratic Party said last month. The Bush camp said it saw no problem, since Kinder left Enron in 1996.

Kinder also held a fund-raiser for Bush in 1998 before he was elected Florida governor.

Aside from the two fund-raisers, the two men have had infrequent contact, said Larry Pierce, a spokesman for Kinder's energy company. The two men have run into each other occasionally at public events and they have never had any business relationship, he added.

Kinder "hosted these fund-raisers as a favor to the Republican Party," said Pierce.

"What Democrats are doing nationally in trying to capitalize on the suffering of Enron employees for their own cheap political gain is absolutely shameful," said Karen Unger, the governor's campaign manager. She called it "an act of sheer desperation" by the Democrats. Bush's tax return was released by his campaign four years ago.

Kinder's latest event for Bush was a $500-per-person fund-raiser on Jan. 17 for about 100 political donors at Kinder's home.

Kinder is a longtime political supporter of the Bush family and the Republican Party with contributions totaling hundreds of thousands of dollars dating to 1988.

In 1997 after leaving Enron, Kinder and a partner paid $40 million for the general partnership that ran Enron Liquids, a pipeline network carrying liquid natural gas.

Kinder, Enron's president from 1990 to 1996, was the heir apparent to Chairman Kenneth Lay. But Kinder resigned when Lay decided to stay on for another five-year term. Kinder's successor, Jeff Skilling, is among those at the center of the various investigations into Enron's collapse.

Bush's re-election effort is one of the major gubernatorial races this fall. Former Clinton Attorney General Janet Reno is one of four Democrats seeking a chance to run against him in November.

Enron's bankruptcy has reverberated in Florida, where losses in the state's $94 billion pension fund are greater than in any other state.

Bush, the state treasurer and the state comptroller oversee the agency in charge of investing the state pension fund.

One of about 70 money managers the state of Florida contracted with was buying Enron stock even after the Securities and Exchange Commission began investigating the energy giant and its business practices.

In 2000, Kinder was one of the Bush presidential campaign's "Pioneers," a designation bestowed on fund-raisers who brought in more than $100,000 apiece in George W. Bush's run for the White House.

Kinder earlier had donated more than $100,000 to George Bush's Texas gubernatorial campaigns and nearly a quarter of a million dollars in soft money to the GOP. He also contributed to the 1988 and 1992 presidential campaigns of Bush's father.

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Associated Press writer David Royse contributed to this story from Tallahassee, Fla.